One year after Lehman’s fall: Are banks wiser?

It has been a year since Lehman Brothers collapsed and nearly brought down the financial world. Some experts say the big banks have been chastened by the global financial crisis of the system that had previously given them unprecedented freedom to lend and leverage as they saw fit. Others say that little has changed since the U.S. and other governments began propping up major banks with loan guarantees and other emergency measures.

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I have a question for anyone that knows about this subject. Late in 2008, President Bush got the Congress to agree to authorize $700B as a part of the TARP (Troubled Asset Relief Program). I seem to recall that shortly thereafter, Treasury Secretary Paulson announced that the Administration would not invest these funds in toxic CDS‚Äôs, etc. which were sitting on the banks‚Äô books and much of these TARP funds were used instead to prop up and provide liquidity to the largest 9 banks and to invest in GM and Chrysler. If I am correct, what ever happened to all of those toxic assets that were said to be the banks‚Äô investment which would lead to their collapse? I hear nothing about those instruments today and yet the major banks seem to be coming back since some of them have already paid the Gov back already. Anyone have some insight into this???

You must be kidding! Wiser? Yeah, they are out there devising insurance schemes, tainted derivitives, and on and on and on. There isn’t a 401K plan in the country that is operating at full bore because most of employees and employers money goes into the funds they offer, not necessarily the funds that will beef up your retirement plans. Banks are banks and they all ought to be ashamed of themselves when it comes to giving consumers a break. What the hell can you earn on .5 interest rates. And they think they are doing you a favor. Check BOFA’s Money market rate–it’s damn near zero, nada. Real banks should not be allowed to own stock houses. That’s the when the greed and all the trouble began.

The congress needs to reinstate Glass-Steagall to, among other things, separate investment banks from commercial banks. The repeal of G-S in 1999 was the banking change that allowed this “too big to fail” situation to develop. Time to admit the mistake and correct it.